A STUDY OF AUTO COMPONENT SUPPLIERS WITH SPECIAL REFERENCE TO ELECTRICAL AND ELECTRONIC COMPONENT MANUFACTURERS

The Indian Auto Components Industry is expected to grow to US$ 33-40 Billion, by 2015 from around US$ 7 Billion, at present. By 2016, the automotive sector is expected to contribute 10% of the country's GDP and 30-35% of the Industry. There is tremendous pressure on giants in the field to produce vehicles and fulfill the demand for the same. This has resulted into a lot of changes in the production processes carried out by these companies. These changes are distinct from the changes forced by the technological development. Further, these changes have added different dimensions to the traditional approaches in almost every function of the business. Certain new concepts have emerged, such as, Vendor Development, Supply Chain Management, Forward and Backward Integration of the production processes, Outsourcing etc. While introducing each new concept, it has been stated that these concepts will lead to reduction of cost with high quality and greater speed in the production processes. This outsourcing has led to increase in SSI units supplying material to these giants. Even the giants have shown interest in starting such a venture. The work load was such heavy that these vendors (i.e. SSI units) have further processed for sub- vendor ship. This has led to the creation of multi-layer production process for the production of one unit/ part of the unit. The small-scale sector has emerged as a dynamic and vibrant sector of Indian Economy. The Sector contributes 40% of the industrial production, 35% of the total exports and employs about 167 lakh persons in about 30 lakh SSI units in the country. The sector acts as a "nursery" for the development of entrepreneurial talent. This sector which manufactures a wide range of more than 7500 products, supplies the lower income groups with inexpensive consumer goods and services. Due to its flexibility, the sector is better able to weather downturns in the country. Small-scale sector suffers from certain handicaps and economies of scale are also not available to it. Support to small industries virtually is a universal phenomenon and exists in one form or the other in almost all countries of the world whether developed or developing.